During the first quarter of the year, the NCUA approved 54 mergers across 30 states, which was significantly higher than the 41 mergers approved at the end of the first quarter in 2015.
However, the NCUA final tally of completed mergers last year totaled 235, which was considerably lower than the 257 completed mergers in 2014, 254 completed consolidations in 2013, and 277 in completed consolidations in 2012. In 2011, there were 238 completed mergers and in 2010, 197 consolidations were consummated.
Last year, Illinois and Michigan posted the highest number of completed mergers at 18 apiece, followed by California (16), Texas (14), Georgia (11), Pennsylvania (11), Wisconsin (11), Iowa (10) and Ohio (10).
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CEO Advisory Group President Glenn Christensen, who provides credit union advisory services in Kent, Wash., anticipated 2016 mergers would stay within the range of 200 to 250. Even as the pool of credit unions continues to shrink, he said he sees more credit unions leveraging a consolidation strategy for future growth.
While most of the credit unions consolidated out of existence in this year's first quarter were well under $50 million in assets, two larger credit unions were merged for expanded services and one for poor financial condition. Additionally, one credit union with more than $190 million in assets had three mergers approved by the NCUA in the first quarter, which is not very common.
Pennsylvania posted the most mergers with five, followed by California, Ohio and Michigan with four each, while Illinois and Texas each had two consolidations in the first quarter.
Although most mergers were approved by the NCUA for expanded services, 11 credit unions or 20% of consolidations were green-lighted in the first quarter because the cooperatives were in poor financial condition.
In addition, the NCUA approved mergers for two credit unions because they lost their sponsor. The federal agency also approved consolidations for credit unions because they were unable to find a new CEO and one cooperative got the OK to merger because of lack of growth.
Beyond the first quarter merger numbers, nine credit unions publicly announced new consolidation agreements in April and May, including two credit unions that are planning to merge into a large California cooperative.
Read more about merger trends in the June 1 issue of Credit Union Times.
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Peter Strozniak
Credit Union Times reporter covering credit union operations, fraud, M&As, leagues, business continuity, and breaking news.
